• With FY2024 appropriations completed, lawmakers are back for the spring work period with a loaded agenda but an unclear path forward.
• While there was hope that the spending deal would include several healthcare proposals, most were excluded from the final package.
• The below list captures the top healthcare priorities that lawmakers will be focused on going forward, with the key question being whether Congress can move any legislation prior to the lame duck session following the election.

Six months into the fiscal year, Congress has finally passed FY2024 appropriations. It was a painstaking process, which many expected to include policy victories that both sides could celebrate. Instead, the spring work period is looking to be another stretch of hurry up and wait, with no clear legislative vehicles or deadlines to compel action, and a consequential Presidential electoral rematch coming into view.

The conventional wisdom is that Congress will punt many of the pending legislative issues until the lame duck, to avoid complicated votes and unforeseen political winds that could give the other side political points to use in the election. The margins in Congress are exceptionally close and will likely come down to just a handful of seats in both chambers.

Below, we outline healthcare topics with a high probability for legislative action. These issues may warrant your attention and consideration for proactive engagement with lawmakers, whether legislative movement occurs now or at the end of the year. These are areas where Congress has devoted considerable time over the previous 12-24 months, must reauthorize a program, or there is significant interest in addressing some relatively new and emerging issue.

ARTIFICIAL INTELLIGENCE
Last fall, the Biden administration issued an executive order to guide federal agencies on the development and use of artificial intelligence (AI). This is particularly relevant to healthcare technology, and the Food and Drug Administration (FDA) reviews of AI-enabled technologies. This year, a U.S. Department of Health and Human Services (HHS) Task Force on AI will develop a strategic plan responsible for the deployment of AI across health settings. On Capitol Hill, there is a bipartisan Senate AI working group gearing up to potentially unveil AI legislation. This legislation or discussion draft would highlight key issues for several, if not all congressional committees and could accelerate already increasing attention from Capitol Hill for AI in the health space. It is clear Congress is prepared to have a more significant role in shaping the future of AI.

BIOSECURE ACT/CHINA
Congress and the administration are accelerating oversight of Chinese-related businesses with ties in the U.S., which could lead to further action later this year. One high-profile bill, the BIOSECURE Act (S. 3558), would prohibit executive agencies from procuring or obtaining any biotechnology equipment or service produced or provided by a “biotechnology company of concern,” or entering into a contract or extending/renewing a contract that uses such equipment or service or that will require the direct use of such equipment or services.

This language has significant implications for healthcare companies who also engage with the federal government. If passed, if U.S. companies purchase biotechnology equipment from companies that may be listed as a biotechnology company of concern, companies would not be able to receive grants, loans, or direct purchase contracts from federal agencies. This would extend to grants from the National Institutes of Health or other HHS agencies, such as the Administration for Strategic Preparedness and Response (ASPR), and potentially other loans or direct grants from other federal entities. A key focus for healthcare stakeholders is how the legislation will handle current contracts, or wind down active contracts to minimize disruption to the healthcare industry if passed.

The Senate Homeland Security and Government Affairs Committee held a markup in March 2024 on the bill, and lawmakers are signaling they will attempt to advance the bill later this year. One potential vehicle for the bill is the National Defense Authorization Act (NDAA), which has been a vehicle for other policies that addressed Chinese-related ties to U.S. businesses or contracts.

DRUG SHORTAGES
There are currently 130 drug products in shortage on the FDA drug shortages list. These products are critical to patients, and Congress and the administration appear deeply engaged on this issue as of late. Congress has spent months debating how to address drug shortages, including holding hearings in September and December 2023 to directly examine the challenges. House Democrats sought to include several drug shortages bills in the pandemic preparedness reauthorization, which has since stalled due to objections over the scope of the package. FDA Commissioner Robert Califf is testifying before the House Oversight Committee on April 11, 2024. He will be asked about FDA’s role and progress in mitigating drug shortages, especially now that House Oversight Democrats are two months into their investigation into various drug shortages.

HHS unveiled a white paper on preventing drug shortages on April 2, 2024 and is working with the Federal Trade Commission (FTC) on a request for information on the root causes of and potential solutions to drug shortages. This reflects some urgency and recognition that more must be done to improve the nation’s supply chain as it relates to drug products.

HEALTHCARE EXTENDERS 
The healthcare extenders, which consist of funding for Community Health Centers (CHC), the National Health Service Corps (NHSC), diabetes programs, delaying disproportionate share hospital (DSH) cuts, and teaching health centers graduate medical education funding (THCGME), are a regular vehicle for legislative action since these programs largely enjoy strong bipartisan support. They had been operating on an extension since October, but a short-term extension was included in the first tranche of FY2024 appropriations, with notable increases and a delay in DSH cuts for safety net hospitals. All these programs are ‘extended’ through December 31, 2024, setting up for another, dare we say it, end-of-year package.

HEALTHCARE TRANSPARENCY & PBM REFORM
Despite a high degree of bipartisan support, advancing healthcare transparency and pharmacy benefit management (PBM) reform has proven difficult. The House overwhelmingly passed the Lower Costs, More Cures Act (H.R. 5378) in December 2023 by a vote of 320-71, and the Senate Finance Committee (S. 2973) and the Senate Committee on Health, Education, Labor, and Pensions (HELP; S. 1339) unanimously approved their respective PBM/transparency packages out of committee. These bills look to increase price transparency and oversight across the health system, and prohibit practices such as spread pricing, or by de-linking how much PBMs profit off the list price of a drug. There is growing urgency to advance this healthcare package after it was not included in the FY2024 spending deal, but it is not clear if there will be enough consensus to move this bill as a standalone package before the election.

MEDICARE PAYMENT CUTS 
In the FY2024 funding deal, Congress agreed to reduce the 3.37% physician pay cut by about half, or 1.68%, that took effect in January. This correction was pursued by virtually all provider groups, and a large cohort of lawmakers, since the Biden administration finalized the pay cut last year. Payment adequacy is a top issue for providers, considering the challenges facing physicians across specialties to uphold access for Medicare beneficiaries. This has led to a persistent drum beat from lawmakers to reform the physician payment process. With several senior lawmakers who sit on key health committees retiring this year, Medicare payment reform is an area to monitor closely. In fact, the Senate Finance Committee is holding a hearing on April 11, 2024 on Medicare physician payment and chronic care.

MENTAL HEALTH
Efforts to improve access to mental health services in Medicare and Medicaid were included in the Senate Finance Committee’s work in 2023. The Better Mental Health Care, Lower-Cost Drugs, and Extenders Act (S. 3430) includes proposals to incentivize physicians and states to maintain or improve access to mental health services. Such provisions include expanding eligibility for Health Professional Shortage Area payment, expanding coverage in Medicare for health behavior assessment and intervention services when provided by clinical social workers, and directing HHS to clarify the use of telehealth. It also requires Medicare Advantage plans to maintain up-to-date provider directories on its websites beginning in plan year 2026.

In 2023, the HELP Committee signaled interest in increasing eligibility for loan repayment programs for certain mental health professionals. In a draft workforce package, committee Democrats included the Mental Health Professionals Workforce Loan Repayment Act of 2023 (S. 462), which acknowledges the multidisciplinary nature of substance use disorder treatment and mental healthcare. Improving access to mental health services will remain a top healthcare priority for Congress this year.

OLDER AMERICANS ACT REAUTHORIZATION
A bipartisan group of senators unveiled a request for information (RFI) in March 2024 launching the effort to reauthorize the Older Americans Act (OAA), which is set to expire September 30, 2024. OAA is an essential bill that authorizes funding for services for older adults and individuals with disabilities, family caregivers, and those living in nursing homes. These services include nutrition, workforce, and other healthcare services. The COVID-19 pandemic transformed how services are delivered through the OAA, and a key question for lawmakers is how those flexibilities may continue in the next reauthorization of the OAA. Stakeholders are also exploring other proposals to increase the direct care workforce, address loneliness, and other solutions to ease access to older adults in need of these services.

PANDEMIC PREPAREDNESS 
The Pandemic and All Hazards Preparedness Act (PAHPA) was first signed into law in 2006 to scale up the federal government’s response to a variety of emergencies. The COVID-19 pandemic brought renewed interest and urgency to the legislation, specifically regarding how to modernize and strengthen federal emergency response programs, like the Strategic National Stockpile (SNS), Project Bioshield Special Reserve Fund (SRF), and the Public Health Emergency Medical Countermeasures Enterprise (PHEMCE). However, the bills authorization expired September 30, 2023.

While the continuing resolution included funding for certain PAHPA programs, most of the program’s authorizations await further Congressional action. Both chambers have passed their respective reauthorization bills out of committee but have been unable to align on the scope of the package, such as how to include proposals to address drug shortages in the final package.

RARE PEDIATRIC DISEASE PRIORITY REVIEW VOUCHER
Congress has until September 30, 2024, to reauthorize the rare pediatric disease priority review voucher (PRV). The PRV was first authorized in 2006 to award priority review vouchers to sponsors of rare pediatric disease product applications that meet certain criteria. If Congress does not reauthorize this program by September 30, 2024, the FDA may only award a voucher for an approved rare pediatric product application under limited circumstances. Congress unveiled bipartisan legislation in February 2024, the Creating Hope Reauthorization Act of 2024 (H.R. 7384), to extend the program through FY2029.

SUPPORT ACT REAUTHORIZATION
In December 2023, the House advanced the Support for Patients and Communities Reauthorization Act (H.R. 4531), which reauthorizes funding for substance use disorder (SUD) prevention and response. The HELP Committee advanced its own version of the reauthorization (S. 3393) out of committee, but it is not clear when the Senate will move to advance the bill out of the chamber or align with the House bill. One provision of the House bill, to lift the Institutions for Mental Disease (IMD) Exclusion, was recently included in the FY24 appropriations package. However, the rest of the SUPPORT Act reauthorization was not included in the latest spending deal.

The Senate Finance Committee Health Subcommittee is holding a hearing on April 9, 2024 on improving SUD care in federal healthcare programs.

TAX DEAL
In a Congress light on legislative activity, key lawmakers drafted and swiftly approved the Tax Relief for American Families and Workers Act of 2024 (H.R. 7024), which passed the House in January 2024. The bill includes an increase in the child tax credit and permits businesses to immediately deduct the cost of their domestic R&D investments instead of over five years. It also extends the allowance for depreciation, amortization, or depletion in determining the limitation of the business interest deduction. To offset the $80B cost of the legislation, the bill moves forward the Employee Retention Tax Credit claim submissions deadline from April 15, 2025, to January 31, 2024, meaning claims after this date will no longer be accepted.

It is unclear when the bill will be advanced in the Senate, or if it will be added to the end-of-year queue. The bill faces an uncertain path forward in the Senate due to objections from senior members of the Finance committee, who have raised concerns with the child text credit provisions.

TELEHEALTH EXTENSION
The COVID-19 public health emergency legislation included several steps to expand telehealth. Many of these Medicare telehealth flexibilities were extended through 2024, such as allowing beneficiaries to receive telehealth services in their home or eliminating the requirement of an in-person visit prior to a telehealth visit. Absent action from Congress, these flexibilities will expire on January 1, 2025. There are several bills in Congress to permanently extend these telehealth flexibilities, most notably the CONNECT for Health Act (S. 2016/H.R. 4149), which would expand Medicare telehealth coverage and make permanent certain COVID-19 telehealth flexibilities.

The Energy & Commerce Health subcommittee is holding a hearing on April 10th on legislative proposals to support patient access to telehealth services and has listed 15 telehealth bills for consideration.

BONUS: DEBT LIMIT
If there was not already enough to do between now and the 119th Congress, the debt limit deal agreed to last year is coming back into view. That deal suspended the debt limit until January 1, 2025, meaning Congress could look to the lame duck to further suspend the limit or actually raise the limit, which gives the Treasury Department more concrete direction with a set debt limit. The risk of default will not be realized on January 1, 2025, but if left unaddressed, it will be a top political issue for 2025 which will implicate a host of other issues, including the budget, as it did in 2023. That said, Congress is unlikely to proactively address the debt limit and complicate what is shaping up to be a loaded lame duck session.

CLOSING
The end of the 118th Congress could be one of the more productive lame duck sessions in recent years, due to many pending items left unaddressed, a record number of retirements, and a growing list of urgent priorities for senior lawmakers. As Congress returns for the spring work period, a key question is whether there will be any momentum to legislate prior to the lame-duck session, and what steps can be taken to position these priorities for action.